Keurig Dr Pepper and Chobani are expanding their beverage distribution partnership while shifting manufacturing capacity. KDP will sell its entire equity stake in Chobani back to the company for $800 million. Chobani will separately acquire Keurig Dr Pepper’s manufacturing facility and warehouse in Allentown, Pa., for about $125 million, including equipment and operations.

Together, the transactions are expected to generate $925 million in pretax proceeds for KDP. The company said it plans to use the net proceeds to reduce debt as it prepares its future Beverage Co. and Global Coffee Co. businesses.

The companies are also broadening their commercial relationship. Keurig Dr Pepper will continue distributing La Colombe ready-to-drink lattes and other Chobani-owned beverages through its direct store delivery network. The agreement also covers future ready-to-drink beverage innovations.

Keurig Dr Pepper’s company-owned direct store delivery network reaches about 80% of the U.S. population, according to Chobani.

The companies will also continue their licensing, manufacturing and distribution agreement for La Colombe-branded K-Cup pods in the United States and Canada. In addition, Chobani will continue manufacturing certain Keurig Dr Pepper products at the facility for a defined period under a co-manufacturing agreement to support the transition.

Chobani plans to make the 1.5-million-ft² Allentown manufacturing and warehouse campus a major production hub. The company expects to invest approximately $1.2 billion in the facility over five years and support more than 900 jobs. Plans call for up to 10 production lines. Chobani said the plant will produce new dairy products, including milk with more protein and less sugar than traditional milk, as well as high protein shakes.

The Allentown site is within 500 miles of about 40% of the U.S. population, giving Chobani additional production capacity near major consumer markets.

Chobani also expects the facility to source more than 3 billion pounds of Pennsylvania milk annually when operating at full capacity.

Under the transaction, Chobani intends to offer employment opportunities to manufacturing and warehouse workers at the site. Delivery, customer service and other corporate employees will remain with Keurig Dr Pepper.

“These transactions reflect the success of our partnership with Chobani and are designed to create value for both organizations,” KDP CEO Tim Cofer said. He said the agreements improve the company’s financial flexibility and manufacturing network while expanding its distribution relationship with Chobani.

Chobani founder and CEO Hamdi Ulukaya said the acquisition will allow the company to increase use of the plant while bringing additional products to consumers through Keurig Dr Pepper’s distribution capabilities.

The Allentown investment is part of more than $4 billion Chobani plans to invest across its U.S. manufacturing network. Other projects include facilities or expansions in New York, Idaho and Michigan, where Chobani produces La Colombe beverages.

The Keurig Dr Pepper and Chobani transactions are expected to close in the third quarter of 2026.